Thesis (MBA)--Stellenbosch University, 2011. / Public private partnerships (PPP) are a critical driving force in the landscape of infrastructure
projects in the world. South Africa’s adaptation of the PPP guidelines is therefore encouraging as it
provides a framework for government and business to partner together in the delivery of basic
infrastructure services to the public. Many challenges have been experienced in the South African
PPP fraternity that have contributed to the stagnation of value-adding projects being implemented.
In spite of these challenges, some developed countries have successfully implemented PPP
projects which have concomitantly presented opportunities and lessons that South Africa can draw
from. This research study investigates the fundamental causes of the challenges present in the
South African PPP market and seeks to employ practical solutions in addressing these.
The challenges have been widespread and include: the management of risk and how to account
for risk; negotiations and the manner in which the procurement phase is operated in PPP projects;
drafting of sound policies; the various complexities that exist within concession agreements;
internal capacity constraints within the PPP Unit; lack of capacity and skills within government
entities and political interference. Several vulnerabilities also exist in the bidding process of many
countries and if these are not properly addressed by the advisors and institutions concerned, these
could potentially delay the entire procurement phase.
PPPs should be seen as a catalyst for providing basic infrastructure services that have the intent of
improving the quality of lives for ordinary citizens. This, however, will only be successfully
addressed once key success factors and lessons are drawn from other international markets that
have demonstrated experience and skill in the implementation of PPPs. Three case studies,
namely, the Gautrain Rapid Railway Link; the PPP between the Eastern Cape Department of
Health and Life Healthcare Group in the Humansdorp district and the Inkosi Albert Luthuli Hospital,
have been investigated to extrapolate key findings and research findings from the procurement
aspects of these projects.
With the increase of PPP projects in South Africa, more research also needs to be conducted in
putting together a standardisation pack for some of the replicated projects. These would include
accommodation and road projects, as many of these have been done previously. Lessons from
these projects should be drawn to formulate sound guidelines for stakeholders.
Government also has an equal responsibility to play in ensuring that it promotes private sector
involvement during the procurement phase by creating an enabling environment which is fair to
bidders and which allows for prompt decision making. Principle agent problem continues to be a
threat to the perception of PPPs as the private sector’s objective is often different from that of
government. It is therefore important that a healthy balance between government’s socio-economic
objectives and the profit-maximising objective of the private sector is met. For the public sector thiS
means not neglecting society’s needs, but at the same time not under-budgeting the unitary
payment of the private sector.
If South Africa ought to remain globally competitive and ahead of its emerging market counterparts,
there needs to be a complete change of priorities regarding the type of PPPs implemented and
government also needs to remain committed and co-operative in the decision-making process.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/21787 |
| Date | 12 1900 |
| Creators | Malao, Mathapelo |
| Contributors | Botha, M. C., Stellenbosch University. Faculty of Economic and Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | English |
| Type | Thesis |
| Format | xii, 80 p. : col. ill. |
| Rights | Stellenbosch University |
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